Hosted by the Mail & Guardian and the PPS team comprising Luigi Marinus, portfolio manager; Hayley Brown, executive of business development; Natalie Kiewitt, client servicing and administration and Marlin Goss, head of PPS specialist support services.
The key takeaway for investors from this webinar was: don’t do anything rash. Panic selling will do more harm than good. The markets will always rebound: look at the long-term horizons, diversify your portfolios as much as possible and, as fees kill your returns, work at pooling your resources.
The Covid-19 crisis and hard lockdowns have caused caused markets to fall dramatically, and the rand, which is always volatile, has fallen by almost 25% against the dollar. Uncertainty still prevails, but the government is taking gradual steps towards lifting the lockdown as economically, it is unsustainable. With lockdowns easing off in other countries and fiscal stimulus packages being introduced, the markets are starting to recover.
After lockdown, there will be a rebound. Some economists are predicting a fast recovery; others say it will take longer. A U-shaped recovery is the most likely, but portfolios should be structured to take all possibilities into account. There is no one-size-fits-all solution for investors. While there are fears of another dip in the market, or even a “double dip”, investors shouldn’t necessarily move to more conservative portfolios or funds. It’s best not to change too much, and rather build robust portfolios.
Although the situation seems dire, there are opportunities in this difficult time. As Winston Churchill said, “we should never waste a good crisis”. Many people are learning to work from home; our asset classes look compelling on valuation grounds; and South Africa is still one the cheapest places in the world to buy a beer.
In summary, investors must remember that the outcome of the pandemic is still uncertain, and the markets are reflecting this. Although there will be volatility for some time to come, the most important thing you can do is to keep an eye on the long-term trajectory.
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